The main objective of this paper is to analyze the supply and demand for sugar in Mainland China. On the supply side, field efficiency and factory efficiency are analyzed, the former focusing on costs of transportation and the costs of producing the sugar crop itself, and the latter concentrating on the management of the sugar factory, labor efficiency, compressing ability and production efficiency in the factory.
From the behavioral characteristics of the demand for sugar in Mainland China, various demand models for the purpose of the analysis are derived. These include the gradual adaptation of the AIDS model in a passive environment, the disequilibrium model which considers the imbalance between consumption and accumulation, price rigidity and rationing, and the recursive model which attempts to consolidate supply and demand under a planned economic system.
By formulating a suitable supply-demand model, we are able to estimate the potential ability of the sugar industry to export in the future. By the method of weighting and averaging, we can estimate the development target of the sugar industry in the future and understand the degree of intensity of competition that exists.
The results of this paper may be summarized as follows. The sugar industry in Mainland China is capable of reaching its target of self-sufficiency by the year 1989, and then in 1990 will have the ability to export about 100 thousand tons of sugar, which is roughly one-third of Taiwan’s sugar exports in 1982 (about 380 thousand tons). From this we may infer that Mainland China’s sugar industry has much potential for development in the near future. However this self-sufficiency and ability to export, will not, over the next ten years, be of any significance to Taiwan, and so there are no grounds to suggest that our overseas markets might suffer. In addition, the above-mentioned results are based on the premise that the political situation on the Chinese Mainland will remain unchanged, and that the same HO – DEN model will be maintained; if not, any chance of development will have been lost.
